Oil prices fall to three-month lows on rising United States inventories

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Crude oil prices fell to three month lows on March 13 as traders doubted that agreed cuts by Organization of Petroleum Exporting Countries and non-OPEC members would significantly reduce the oil supply glut offsetting rising United States supplies.

In November, the Organization of Petroleum Exporting Countries and other oil-producing nations agreed to lower their output for much of 2017 to rein in chronic oversupply and to boost prices.

Oil steadied below $49 a barrel as USA drillers continued to boost activity, countering OPEC's efforts to drain a global glut.

This has led some analysts to believe a collision between the US and OPEC is looming around the corner if United States production brings to market enough oil to push prices below $50.

Brent crude oil gained 15 cents to reach $52.34 a barrel USA crude oil was also up by 15 cents to get traded at $49.43 per barrel, reported Reuters. US oil futures traded as high as $48.68 a barrel earlier in the session. The slide in oil prices, which had traded between $50.50 and $55.24 since December 16, helped drag the S&P 500 to its first weekly decline since January.

Saudi Arabia has made the largest cuts of the OPEC countries, and as the largest exporter in the world, the country tends to drive OPEC policy.

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The Permian Basin, of west Texas and southeastern New Mexico, once again accounts for the lion's share of the production gains.

Futures were little changed in NY after falling 9.1% last week, the biggest weekly loss since November.

The near-record concentration of hedge fund long positions in oil significantly raised the risk of a crowded trade and likely contributed to the sharp fall in the price of oil starting on March 8. Prices have fallen to the lowest level since before the OPEC deal was announced, as US inventories climbed to a new record high last week. "For the market to establish the fact that it has finally hit bottom, we really have to get the price of oil back above $US50 a barrel, which is still a tall order at this point".

The crude price has fallen by more than 9% since last Monday, its biggest week-on-week drop in four months.

Additionally, weekly figures also showed USA oil production rose to 9.1 million barrels a day, the highest level in more than a year. Crude production rose to 9.09 million barrels a day, the highest since February 2016.